For Hong kong, the reason behind is not that simple......first $6.06 is tax, second about 50% of the price is the same as the US pump price, the other 50% is actually the overhead or the other cost and profit.
Since the banned of cigarets advertising and sponsorships, HKG 's media rely on 2 industries only:1) property developers, and 2) Oil Companies. HKG is also one of the most expensive places for putting up ads...... so here is where the fixed cost increases. Second of all, check where are these oil companies' offices are located, they are located at PRIME business districts where rent has been doubled over the past 5 years.
Oil companies get preferential rates on land uses or stations or storage, but not for their offices. And due to the profitability and also the oligopoly of the nature of the industry, they can easily transfer their cost to the end consumer via the pumps.
There is a structural change required in order to change all these:
1) allow more land allowed to be used for stations, and all brands have to be on the same street next to each other. This creates competition on pump prices.
2) Allow more companies to come in, e.g., BP, Petronas..etc
3) Weekly disclose of import prices mandatory. This is the price of Singapore of shore gasoline.
4) Allow more LPG cars.
5) Do not allow gifts or premium items.
6) Oil companies DO NOT allow to have off site offices ( they want an office, stay at their sites).
If all these are done, pump prices will come down naturally. |
